A dormant asset is an asset that was once owned by a corporation or person, but is now in the possession of a government agency due to inactivity, abandonment or the failure of the person to claim their right to the asset within legal time limits. Dormant assets include assets that have been lost due an inability of a third party to pay monies it has a contractual obligation to pay to a corporation or individual due to being unable to contact the owner to arrange payment.
Jurisdictions around the world enforce legislation which mandates that financial institutions and in certain jurisdictions, businesses and individuals, report and turnover funds due to a corporation or person to a government agency. This is enforced after a specified period by the financial institution or third party unsuccessfully attempting to return the assets to their owner. The specified period for the asset to become “dormant” varies by jurisdiction from three to ten years.
Yes, depending on the value, class and jurisdiction of a dormant asset, the statute of limitations period for the owner to make a claim is three years to one hundred years. The average statute of limitations period to make a claim is shortening as government agencies seek to increase revenues from dormant asset confiscation to reduce their deficits. Dormant assets are the fourth or fifth largest source of tax revenues in most jurisdictions.